When it opened in 1961, Joban Hawaiian Center was the country's first-ever theme park. It thrilled the hard-working post-war generation with a fantasy of palm trees, hot springs and hula girls dancing in grass skirts.

In the five decades since, it has only grown in popularity, changing its name to Spa Resort Hawaiians and drawing 3.8m hotel guests last year and a further 1.5m day trippers to its giant tropical dome, filled with water slides and a giant pirate ship.

Before the resort opened, Iwaki was a grim coal-mining town and the site of the Sendai No.1 POW camp during the Second World War where 252 British prisoners were sent to work in the mines, and where at least 22 of them died.

In the 1960s, however, as Japan turned away from coal to other forms of energy, including nuclear, Iwaki's economy found itself on the verge of collapse.

The story of its transformation into a Hawaiian paradise even became the subject of a movie in 2006, called Hula Girls, a Japanese version of Brassed Off in which the local girls in Iwaki start dancing in grass skirts to "save the town" against the wishes of their dour coal-mining parents.

Today, however, the Spa Resort Hawaiians is closed for business, and in the shadow of the nuclear emergency at Daiichi, it is unclear whether it can ever attract hordes of tourists again. Builders are busy working on a new six-storey hotel, but no one knows if it will ever hold any guests.

"No one here is blind to the impact of what has happened at the nuclear plant will have on the local area," said one security guard outside the gates. "We have reached the lowest of the low. It cannot get any worse. But we cannot think negatively or we would have to give up. We have chosen to be positive," he said.

A spokesman for the resort simply said that repairing the damage the earthquake did to the pipes that funnel the area's natural hot springs into the pools would cost "several hundred million yen", and that he was worried that fearful Japanese may never come back to Fukushima.

Meanwhile, the 30 hula girls at the resort have gone on a nationwide tour, starting in Tokyo, to try to persuade the Japanese public that Iwaki is still safe. "People now associate Fukushima with people exposed to radiation," said Ayumi Sudo, 45, one of the dancers. "We have felt like dancing naked to show we are not contaminated. I want to see tourists coming back and revive Iwaki as it was before, with delicious fish, vegetables and fruits as well as a beautiful ocean view."

For Fukushima, however, the future is looking grimmer than ever before. The prefecture's main industries are tourism, agriculture, fishing and manufacturing. Rice from Fukushima is famous throughout Japan and the area is one of the country's top producers of peaches, apples, pears, tomatoes and cucumbers, as well as leaf tobacco and raw silk. The haul of fish from the prefecture's 100 mile-long stretch of Pacific coast is one of the largest in Japan.

In Tokyo, the government is frantically trying to reassure Japanese consumers that produce from Fukushima remains safe to eat and has staged a series of events where prominent cabinet ministers, including Yukio Edano, the chief cabinet secretary, munched their way through tomatoes, strawberries and cucumbers.

But jittery buyers are shunning the markets, and all fishing has been stopped by the problems at Daiichi. "People say they are supporting us, but they choose not to eat Fukushima goods and manufacturers are shifting their lines of production. Superficially they are supporting us, but substantially they are not," said Professor Toshifumi Tadaka, an economist at Tohoku university whose family lives in Fukushima.

Fukushima is also an ageing prefecture. "Agriculture remains the prefecture's major industry, but the number of people engaged in full-time farming decreases every year and the rise in the number of elderly farmers presents a serious problem," said the local government's international affairs division. With many young people now evacuating the area because of the crisis, there is a worry they may find jobs elsewhere and never return.

In the coming months, as investment pours into Fukushima to rebuild its economy, there is an opportunity to remodel the economy once again and create new industries. But it is unclear if anyone will be able to make the same leap of imagination that led to the creation of the Hawaiian Center in the 1960s.

"We have to be patient," said Professor Tadaka, arguing against any leap into an unknown industry. "We think we should return to agriculture, fisheries and forestries," he said. "If young people wish to leave then they can." And if the local economy declines, he said, it would simply be the responsibility of the people to consume less.

"If you earn two million yen a year (£15,000) then you must learn to live within that." The professor is pencilling in at least ten years for the North East region to fully recover from the triple calamity of quake, tsunami and nuclear crisis.

Others blame Japan's stultifying political system for a failure of vision. "Even if someone came up with an excellent idea, such as creating a solar power industry here, it would never get off the

ground with all the bickering and back-and-forth," said Teruhisa Nakamura, the president of the Sendai 89ers basketball team. "The ideas that worked in the 1970s and 80s will not work now the era of growth is over. What we need now is some kind of change," he added.